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August 4, 2006
Coal: Alaska's Other Black Gold
Part One of a Two Part Series
by Brian Yanity, insurgent49

     Coal is the world’s most abundant fossil fuel. First mined in England around 1000 A.D., coal is a combustible black or brownish sedimentary rock, a hydrocarbon in solid form. The industrial revolution of the 18th and 19th centuries was mostly powered by coal.

     Today, coal is responsible for about a quarter of total world primary energy consumption, and 40% of world electricity production. Not surprisingly, coal-fired power plants are the largest single source of electricity worldwide, and more than half of the electricity produced in the US comes from coal-fired power plants. Coal is also vital for many industrial processes, and it can be made into many petrochemicals from solid form. For example, almost 70% of global steel production is dependent on coal.

     However, coal is the dirtiest fossil fuel, with the most carbon-intensive emissions of any fuel. Coal burning also produces particulates (soot), mercury and other heavy metals, and sulfur dioxide, which in turn combines with water droplets to form acid rain. Some studies claim that coal power plant emissions are responsible for tens of thousands of premature deaths annually in the U.S., and many more in coal-intensive countries such as China and India.

     Aside from air pollution, other common environmental problems of coal mining include water pollution and erosion problems.  The two major coalmining methods are surface or ‘open cast’ and underground or ‘deep’. The hazards of underground coal mining are evident in the recent coal mine disasters in Appalachia and the constant stream of coal mine disasters in China, where there are over 5,000 coal mine fatalities per year.

     For all its disadvantages, the biggest advantage coal has is that there is lots of it. While estimates of the world’s hydrocarbon reserves vary, coal is certain to outlast oil and gas supplies. The world’s proven coal reserves will last an estimated 300 years, at the present rate of mining. Coal is also cheap: the price per million BTU of coal is $1, while for natural gas it is $7, and $23 for diesel.

     The US has an estimated 254 billion (short) tons of recoverable coal, while China has an estimated 115 billion short tons (one short ton = 0.91 metric tons). China is both the world’s largest producer and consumer of coal: 69% of China’s primary energy is from coal, compared to a world average of 26%. By 2020, China is expected to have more electrical generating capacity (coal and all other sources) than the US.

     However, China overall produces 94% of the energy it consumes, the only energy source being imported being oil and natural gas (from Russia and former Soviet countries). This heavy dependence on coal has its cost: according to the government of China, 60% of Chinese cities have serious air pollution problems.

     Most energy experts around the globe agree that coal is ‘back on the agenda’, although in most places it never went away.  The International Energy Agency projects that world coal use by 2020 will be over 7.3 billion metric tons per year, or one billion metric tons more than the present rate of consumption. Coal is seen by many as a practical answer for the ‘peak oil’ scenario, especially with the prospect of coal-to-liquids for transportation fuel.

     The ‘coal peak’ in the US is predicted to happen around the year 2050. During the ‘dash for gas’ of the 1990s, there was too much growth in natural gas power generation capacity worldwide, which drove up gas prices to the point where coal is now much cheaper by comparison. Wyoming, presently the largest coal-producing state in the country, now is experiencing a ‘coal boom’. Other key coal states include West Virginia, Kentucky, Pennsylvania, Texas, Montana, Virginia, Illinois and North Dakota.

     Coal in Alaska

     By most estimates, Alaska possesses about half of the coal reserves of the US, and 1/8th of the world’s coal. The North Slope is estimated to have coal deposits between 2 and 5 trillion short tons, which includes speculative unproven resources such as off Alaska’s Arctic Ocean coast.



     However, the Great Land is short on quality coals that are easy to reach. At current levels of technology and coal prices, less than about 20% of known U.S. coal is ‘economically recoverable’ because it is deeply buried and hard to extract, though in Alaska this percentage is much less.

     Around 8% of Alaska’s electricity comes from coal, and several Fairbanks-area coal plants, such as those used by the military and UAF, utilize cogeneration, producing both heat and electricity. The largest coal-fired plants in the state are the 28 MW Chena coal-fired power plant in Fairbanks, owned by Aurora Energy, and the 27 MW ‘minemouth’ coal-fired power plant in Healy owned by Golden Valley Electric Association.

     The types of coal found in Alaska include lignite, sub-bituminous and bituminous, which tend to have a low sulfur content, resulting in less sulfur dioxide emissions. Alaska’s coal is “young” coal, aging from 30 to 130 million years ago, with a high water content. The best types of coals are ‘cooked’ underground: high-quality bituminous and anthracite formed about 300 million years ago. The coal of highest ‘rank’, anthracite, is not found in Alaska.

     Commercial coal production in Alaska was started in 1855 by the Russian-American Company, at Port Graham on the Kenai Peninsula. This operation mostly supplied Russian ships, and only lasted until 1865. By the early 1900s, various small coalmining operations popped up all over the state, most of which were short-lived.

     Coal was mined by Alaska Engineering Commission, under contract to the U.S. Navy, in Chickaloon from 1917 until 1925, and in nearby Eska until 1948. Yukon River steamers started converting to oil by the early 1900s, though Alaska coal production constantly increased up through WWII. The Alaska Railroad used coal-powered locomotives for the first two decades of its operation, but started converting to oil-powered engines in 1946.

     For all of the present-day “coal renaissance”, the world isn’t exactly rushing to buy Alaska coal. The Usibelli Coal Mine near Healy (www.usibelli.com) is the state’s only operating coal mine, with about 85 employees that work year round. Before the Usibelli surface mine opened in 1943, all of Alaska coal mining was done with traditional underground methods. The mine area has proven reserves of 100 million short tons of sub-bituminous coal, and estimated resources of up to 250 million short tons.



     In 2005, Usibelli mined 1.5 million short tons (representing at least $60 million), with 900,000 tons of this consumed within Alaska, 400,000 shipped to South Korea, and 200,000 tons going to Chile. None of Alaska’s coal goes to other parts of North America. For export, the Usibelli coal is shipped by rail south 300 miles to the special coal terminal in Seward. The family-owned Usibelli Coal Mine, Inc. claims that production could be ramped up to 2.5 million short tons per year, but the mine still finds it hard to market the Alaska coal. 



     Because it is so capital-intensive, economy of scale is very important for coal mining. Many communities in rural Alaska have coal reserves nearby, but mining on such a small scale is uneconomic. Delivery of coal to remote, small communities is also very costly, with the possible exception of barge transportation. Heating and power generation from coal applications has been proposed for rural Alaska communities, but no small-scale coal plants have yet been built. Recent feasibility studies for small-scale coal plants in Galena and McGrath found that such plants were not economical at current diesel prices.

     Historically, coal-bed methane has been the biggest source of danger for underground coal miners, but has come under increased interest as an alternative source of natural gas. Alaska’s total coal-bed methane resource has been estimated to be over 1,000 trillion cubic feet (tcf), with 600-800 tcf of this amount found on the North Slope, and about 200 tcf found in the Cook Inlet region.

     Coal-bed methane is usually ‘shallow’ gas, and thus could be economical for small communities. Subsurface minerial claims have been already filed (and disputed) in the Matanuska-Susitna Valley, had have been studied in Fort Yukon, Chignik on the Alaska Peninsula, and in Wainwright near Barrow. But no commercial production of coal-bed methane yet exists in Alaska.


     Next, in part two of “Coal: Alaska’s other black gold”: emerging clean coal technologies and the future of Alaskan coal.









Brian Yanity is a graduate student at UAA, activist and freelance writer. He resides in an undisclosed location in Southcentral Alaska, and can be reached at byanity@insurgent49.com.
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